112 5 Result of Analysis and Interpretations
5.2.2.2.2 Sub-Category 1: Risk Management
Another aspect related to the brand reputation is reputation risk management.
While it is not new that organizations seek to enhance and manage their repu-
tation risk, it is a result of the analysis of this study that organizations see their
commitment in a circular economy as contributing to this objective. Moreover, a
certain parallel can be identified when considering the academic discourse on the
relationship between reputation risk management and corporate social respon-
sibility (CSR) reporting. The literature distinguishes reputation by the following
three aspects: financial/economic, social and environmental. Furthermore, the
CSR reporting is mainly used to manage the social and environmental dimension
of the organization’s reputation (Unerman 2008). While one stream in literature
states that reputation risk management is a highly complex concept and cannot be
influenced by the organizations, the other sees in reputation risk management an
explanation for CSR reporting (Bebbington et al. 2008).
There is still an ongoing debate on whether reputation can or cannot be directlymanaged, however, the results of this study show that corporate managers believe
in the possibility of doing so. With their engagement in a circular economy, or-
ganizations are managing stakeholder expectations. By doing so the corporation
is attempting to demonstrate how well the corporation’s engagement meets the
social and, more importantly, environmental expectations of their stakeholders
which is a common objective for reputation risk management (Unerman 2008).
The citation from the representative of case Zeta describes it as follows: “There is
the reputation topic which plays an important role for us. There is a lot of awareness
on the topic sustainability, and many NGOs such as Greenpeace have their focus on
the textile industry. But we had a stakeholder dialog with Greenpeace and after this
dialog Greenpeace issued a press release on chemicals and pollutants in the textile
industry” (see Appendix: German Quote 70).
The commitment to circular economy and the related in-depth insights into thetopic further prepare the organizations for potential campaigns trying to harm the
perception of the brand. Hence, it facilitates damage control and proves a sincere
commitment to topics such as environmental protection and resource efficiency.
Interviewee of case Eta forms it as follows: “It means we must do less damage
control when there is an NGO campaign trying to harm us as we have something to
prove our commitment over the past years. This is not our main motivator, no carte
blanche, and it doesn’t protect from attacks from the press, but it makes it easier for
us because we have planned ahead in contrast to some competitors” (see Appendix:
German Quote 71).